AC Investment Research

CIB BanColombia S.A. Common Stock Research Report

Outlook: BanColombia S.A. Common Stock is assigned short-term Ba1 & long-term Ba1 estimated rating.
Dominant Strategy : Wait until speculative trend diminishes
Time series to forecast n: 10 Jan 2023 for (n+6 month)
Methodology : Deductive Inference (ML)

Abstract

BanColombia S.A. Common Stock prediction model is evaluated with Deductive Inference (ML) and Statistical Hypothesis Testing1,2,3,4 and it is concluded that the CIB stock is predictable in the short/long term. According to price forecasts for (n+6 month) period, the dominant strategy among neural network is: Wait until speculative trend diminishes

Key Points

  1. How accurate is machine learning in stock market?
  2. Game Theory
  3. Fundemental Analysis with Algorithmic Trading

CIB Target Price Prediction Modeling Methodology

We consider BanColombia S.A. Common Stock Decision Process with Deductive Inference (ML) where A is the set of discrete actions of CIB stock holders, F is the set of discrete states, P : S × F × S → R is the transition probability distribution, R : S × F → R is the reaction function, and γ ∈ [0, 1] is a move factor for expectation.1,2,3,4


F(Statistical Hypothesis Testing)5,6,7= p a 1 p a 2 p 1 n p j 1 p j 2 p j n p k 1 p k 2 p k n p n 1 p n 2 p n n X R(Deductive Inference (ML)) X S(n):→ (n+6 month) R = r 1 r 2 r 3

n:Time series to forecast

p:Price signals of CIB stock

j:Nash equilibria (Neural Network)

k:Dominated move

a:Best response for target price

 

For further technical information as per how our model work we invite you to visit the article below: 

How do AC Investment Research machine learning (predictive) algorithms actually work?

CIB Stock Forecast (Buy or Sell) for (n+6 month)

Sample Set: Neural Network
Stock/Index: CIB BanColombia S.A. Common Stock
Time series to forecast n: 10 Jan 2023 for (n+6 month)

According to price forecasts for (n+6 month) period, the dominant strategy among neural network is: Wait until speculative trend diminishes

X axis: *Likelihood% (The higher the percentage value, the more likely the event will occur.)

Y axis: *Potential Impact% (The higher the percentage value, the more likely the price will deviate.)

Z axis (Grey to Black): *Technical Analysis%

IFRS Reconciliation Adjustments for BanColombia S.A. Common Stock

  1. If the group of items does not have any offsetting risk positions (for example, a group of foreign currency expenses that affect different line items in the statement of profit or loss and other comprehensive income that are hedged for foreign currency risk) then the reclassified hedging instrument gains or losses shall be apportioned to the line items affected by the hedged items. This apportionment shall be done on a systematic and rational basis and shall not result in the grossing up of the net gains or losses arising from a single hedging instrument.
  2. When rebalancing a hedging relationship, an entity shall update its analysis of the sources of hedge ineffectiveness that are expected to affect the hedging relationship during its (remaining) term (see paragraph B6.4.2). The documentation of the hedging relationship shall be updated accordingly.
  3. To calculate the change in the value of the hedged item for the purpose of measuring hedge ineffectiveness, an entity may use a derivative that would have terms that match the critical terms of the hedged item (this is commonly referred to as a 'hypothetical derivative'), and, for example for a hedge of a forecast transaction, would be calibrated using the hedged price (or rate) level. For example, if the hedge was for a two-sided risk at the current market level, the hypothetical derivative would represent a hypothetical forward contract that is calibrated to a value of nil at the time of designation of the hedging relationship. If the hedge was for example for a one-sided risk, the hypothetical derivative would represent the intrinsic value of a hypothetical option that at the time of designation of the hedging relationship is at the money if the hedged price level is the current market level, or out of the money if the hedged price level is above (or, for a hedge of a long position, below) the current market level. Using a hypothetical derivative is one possible way of calculating the change in the value of the hedged item. The hypothetical derivative replicates the hedged item and hence results in the same outcome as if that change in value was determined by a different approach. Hence, using a 'hypothetical derivative' is not a method in its own right but a mathematical expedient that can only be used to calculate the value of the hedged item. Consequently, a 'hypothetical derivative' cannot be used to include features in the value of the hedged item that only exist in the hedging instrument (but not in the hedged item). An example is debt denominated in a foreign currency (irrespective of whether it is fixed-rate or variable-rate debt). When using a hypothetical derivative to calculate the change in the value of such debt or the present value of the cumulative change in its cash flows, the hypothetical derivative cannot simply impute a charge for exchanging different currencies even though actual derivatives under which different currencies are exchanged might include such a charge (for example, cross-currency interest rate swaps).
  4. If changes are made in addition to those changes required by interest rate benchmark reform to the financial asset or financial liability designated in a hedging relationship (as described in paragraphs 5.4.6–5.4.8) or to the designation of the hedging relationship (as required by paragraph 6.9.1), an entity shall first apply the applicable requirements in this Standard to determine if those additional changes result in the discontinuation of hedge accounting. If the additional changes do not result in the discontinuation of hedge accounting, an entity shall amend the formal designation of the hedging relationship as specified in paragraph 6.9.1.

*International Financial Reporting Standards (IFRS) adjustment process involves reviewing the company's financial statements and identifying any differences between the company's current accounting practices and the requirements of the IFRS. If there are any such differences, neural network makes adjustments to financial statements to bring them into compliance with the IFRS.

Conclusions

BanColombia S.A. Common Stock is assigned short-term Ba1 & long-term Ba1 estimated rating. BanColombia S.A. Common Stock prediction model is evaluated with Deductive Inference (ML) and Statistical Hypothesis Testing1,2,3,4 and it is concluded that the CIB stock is predictable in the short/long term. According to price forecasts for (n+6 month) period, the dominant strategy among neural network is: Wait until speculative trend diminishes

CIB BanColombia S.A. Common Stock Financial Analysis*

Rating Short-Term Long-Term Senior
Outlook*Ba1Ba1
Income StatementB2Baa2
Balance SheetB2Baa2
Leverage RatiosCCaa2
Cash FlowB1Baa2
Rates of Return and ProfitabilityB3Baa2

*Financial analysis is the process of evaluating a company's financial performance and position by neural network. It involves reviewing the company's financial statements, including the balance sheet, income statement, and cash flow statement, as well as other financial reports and documents.
How does neural network examine financial reports and understand financial state of the company?

Prediction Confidence Score

Trust metric by Neural Network: 79 out of 100 with 704 signals.

References

  1. Bierens HJ. 1987. Kernel estimators of regression functions. In Advances in Econometrics: Fifth World Congress, Vol. 1, ed. TF Bewley, pp. 99–144. Cambridge, UK: Cambridge Univ. Press
  2. Batchelor, R. P. Dua (1993), "Survey vs ARCH measures of inflation uncertainty," Oxford Bulletin of Economics Statistics, 55, 341–353.
  3. V. Konda and J. Tsitsiklis. Actor-Critic algorithms. In Proceedings of Advances in Neural Information Processing Systems 12, pages 1008–1014, 2000
  4. R. Sutton and A. Barto. Reinforcement Learning. The MIT Press, 1998
  5. Bickel P, Klaassen C, Ritov Y, Wellner J. 1998. Efficient and Adaptive Estimation for Semiparametric Models. Berlin: Springer
  6. F. A. Oliehoek and C. Amato. A Concise Introduction to Decentralized POMDPs. SpringerBriefs in Intelligent Systems. Springer, 2016
  7. Breusch, T. S. A. R. Pagan (1979), "A simple test for heteroskedasticity and random coefficient variation," Econometrica, 47, 1287–1294.
Frequently Asked QuestionsQ: What is the prediction methodology for CIB stock?
A: CIB stock prediction methodology: We evaluate the prediction models Deductive Inference (ML) and Statistical Hypothesis Testing
Q: Is CIB stock a buy or sell?
A: The dominant strategy among neural network is to Wait until speculative trend diminishes CIB Stock.
Q: Is BanColombia S.A. Common Stock stock a good investment?
A: The consensus rating for BanColombia S.A. Common Stock is Wait until speculative trend diminishes and is assigned short-term Ba1 & long-term Ba1 estimated rating.
Q: What is the consensus rating of CIB stock?
A: The consensus rating for CIB is Wait until speculative trend diminishes.
Q: What is the prediction period for CIB stock?
A: The prediction period for CIB is (n+6 month)

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